A structured settlement is usually given to a plaintiff in a civil case. The settlement is usually determined by a number of factors, but it is usually the judge that devises the final amount. However, a structured settlement is different from standard settlements in that the payments are made over a long period of time. Typically, the defendant makes these payments on a monthly basis and it can be a great way to secure monthly installments. However, there may come a time when you need more money than what is coming in on a monthly basis – either to cover debts or to pay for medical bills. This is why selling your structured settlements may be a smart idea. However, before you sell your payments, you’ll want to know some of the basics of how selling a structured settlement works. Here are some of the basics of selling structured settlements.
- A structured settlement is usually purchased by a financial group or company that benefits or profits from future payments. When you are seeking to sell your structured settlement, you want to find a financial company, like the Dolphin Asset Group, that specializes in these types of sales.
- It is important to know if selling your structured settlement is a good idea or not. In some cases, selling your structured settlement may not be a good idea. For instance, if your settlement is coming to a close and there are only a few payments left, selling the settlement may not be worth it. Moreover, it may not be worth it to sell your settlement if interest rates are low and your settlement may not be worth as much as it should be.
- There may be a hearing in front of a judge to determine whether selling the settlement is a good idea. In most states, there is a law that states that any sale of a structured settlement must be overseen in a civil court – typically by the judge that awarded the structured settlement. The judge will determine whether or not selling the settlement is in the best interests of the plaintiff.
- You must find out in the terms of the settlement plan if you can actually sell your structured settlement. In some cases, you may not be able to sell your settlement – in any capacity. There may be a clause that says that you cannot transfer the rights of the settlement to any company. Usually, these clauses are put in place as a compromise between the plaintiff and the defendant in the original case. It is important to find out if your settlement has this clause.
- Your lump payment from the sale of your structured settlement may be tax-free. When it comes down to it, there is a good chance that the lump sum for your structured settlement will be tax-free, which means that you won’t have to be worried about losing a major percentage from the total amount. In the end, this is important to think about, especially right around tax time.
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